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Brazilian Economic Crisis
Brazil is currently experiencing an acute economic crisis that continues to ravage its prospects for a strong and stable economy. The crisis presents numerous challenges to poor Brazilians who struggle for survival. The crisis has worsened because of economic policies put in place by the government and ratified by the International Monetary Fund and the United States’ authorities (Brainard 21). The crisis continues to generate international concern, especially from international press and economic observers (Brainard 23). Many international powers viewed Brazil as an emerging economic powerhouse. However, the current economic crisis has lowered the prospects of Brazil’s rise to economic supremacy.
The crisis resulted from economic policies enacted by president Cardoso during his re-election campaigns (Cohen 45). Attempts to diffuse the crisis, supported by international monetary institutions, have failed. Experts have tried synchronising the local currency with the American currency. This attempt has failed to generate expected results (Cohen 47). This aimed to increase the inflow of foreign exchange with a view to garner sufficient reserves to sustain the exchange rate. This strategy has produced unsatisfactory results. Consequently, citizens no longer believe in the government’s ability to manage the economy (Nanto 12). The current economic down turn is attributed to historical practices that continue to have negative effects on the country’s economy. Analysts believe that political patronage and interference are key contributors to the current economic crisis (Nanto 17).
Argentine Economic Crisis
The economic crisis in Argentina occurred between 1999 and 2002. It commenced in 1999 with a sharp decline of the Gross Domestic Product (Taylor 67). The crisis caused numerous problems for the country. It resulted to the crumbling of the government, rise in the country’s external debt, high unemployment rates, civil unrests, and deterioration of the local currency against the dollar (Taylor 71). By the end of 2002, economic growth had returned to normal levels. This was contrary to the expectations of economic experts and analysts. Due to this recovery, the government managed to pay IMF loans (Epstein 43). The crisis was attributed to the country’s history of military dictatorship.
The military rule was responsible for numerous economic hardships that were encountered by the country. During this period, the country accumulated foreign debts for non-existent projects (Epstein 46). By the end of military rule, the levels of employment were high and unprecedented. After holding democratic elections in 1983, the government embarked on implementing new economic policies with a view to change the country’s economic course (Bao 11). The new administration had to borrow funds to finance the implementation of these policies. Eventually, the country failed to finance the loans. This eroded the confidence of donors and other financiers in the international community. The economic crisis has resulted in political and economic turmoil that has had adverse effects on the image of the country (Bao 14).
Works Cited
Bao, Sandra. Argentina. London: Lonely Planet, 2010. Print.
Brainard, Lael. Brazil as an Economic Superpower: Understanding Brazils Changing Role in the Global Economy. London: Brookings Press, 2012. Print.
Cohen, Michael. The Global Economic Crisis in Latin America: Impacts and Responses. Newyork: Routledge, 2012. Print.
Epstein, Edward. Broken Promises: The Argentine Crisis and Argentine Democracy. London: Lexington Books, 2006. Print.
Nanto, Dick. Global Financial Crisis: Analysis and Policy Implications. London: DIANE Publishing, 2010. Print.
Taylor, Alan. A New Economic History of Argentina. London: Cambridge University Press, 2003. Print.
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